BEFORE THE OIL AND
GAS CONSERVATION COMMISSION
OF THE STATE OF
COLORADO
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IN
THE MATTER OF ALLEGED VIOLATIONS OF THE RULES AND REGULATIONS OF THE COLORADO
OIL AND GAS CONSERVATION COMMISSION BY ANTERO RESOURCES CORPORATION,
FORMERLY ANTERO RESOURCES PICEANCE LLC IN GARFIELD COUNTY, COLORADO
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CAUSE
NO. 1
ORDER
NO. 1V-411
DOCKET
NO. 1305-OV-09
AMENDED
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AMENDED
ADMINISTRATIVE ORDER BY CONSENT
(Pursuant
to Rule
522.b.(3) of the Rules and Regulations of the
Colorado Oil and Gas
Conservation Commission, 2 CCR 404-1)
FINDINGS
1.
During the period
relevant to this enforcement action, Antero Resources Piceance Corporation, now
reorganized as Antero Resources Corporation through subsequent merger and
name changes (“Antero”) operated 36 wells on five well pads in the
floodplain of the Colorado River in the Silt/Rifle area. These pads include the
Island Park Pad, River Ranch A Pad, River Ranch B Pad, River Ranch C Pad, and Robinson
A Pad.
2.
Antero constructed
a water pipeline (Pipeline) to connect these well pads in September 2009. The
Pipeline was placed into service by the end of September 2009. The Pipeline
transported produced water containing dissolved hydrocarbons and frac
fluids from the River Ranch, Robinson and Island Park pads to the
Wasatch Bench Pond [facility id 149020] (also known as Brynildson Water Storage
Facility) [location id 414907].
3.
The Pipeline lies
beneath a private road having restricted access near the boundary between Sections
6 and 7, Township 6 South, Range 92 West, 6th P.M., in Garfield
County, just north of Interstate 70.
4.
Grant Brothers
Construction LLC, (“Grant Brothers”) operates a gravel mine immediately west of
the Pipeline. The sand and gravel pit, known as the Loesch Pit (aka Grant
Brothers Gravel Pit) has operated under a mining permit from the Colorado
Department of Mine Reclamation and Safety (DRMS), permit # M1981068, since 1981.
The Loesch Pit occupies portions of Lots 6 and 7, the SWSE ¼ and SESE ¼ of
Section 7, Township 6 South, Range 92 West, 6th P.M.
5.
On July 27, 2010,
Doug Grant contacted the COGCC Staff to complain that he had observed “a
paraffin-like substance” with a “strong condensate smell” leaking into his
gravel pit from the eastern wall (Complaint No. 200266651).
6.
Antero undertook
response actions, stopped the flow from the Pipeline, intercepted and diverted
all released water from potentially impacting the Colorado River, and reported
the release to all applicable regulatory agencies the same day the release was
discovered.
7.
On July 28, 2010,
the release point was identified as a faulty weld in a pipe joint of the water Pipeline
used to transfer produced water and water for fracture stimulations to and from
the River Ranch A and B Pads and the Robinson A Pad. The compromised weld
allowed produced water to migrate into the underlying alluvium through a
pinhole leak. The produced water eventually came into contact with the
groundwater which flows towards and exits at an artificial seep at the gravel
pit west of the Pipeline. Antero later reported that the produced water
typically contains 400-800 parts per million (ppm) oil in water as an emulsion.
8.
On August 3, 2010,
Antero reported its ongoing remediation efforts to the
COGCC and to the Grant Brothers. Antero reported that between the time of the
discovery on the afternoon of July 27, 2010, and August 1, 2010, about 3,750
barrels of impacted water had been collected using a vacuum truck. Antero continued
its collection efforts, capturing [language deleted] the impacted water,
until completion of its 2012 excavation project described herein.
9.
On August 18,
2010, Antero submitted a Form 27 Site Investigation and Remediation Workplan,
which was approved by the COGCC (Remediation Project No. 5171).
10.
Between August 31,
2010 and September 2, 2010, Antero conducted an initial round of monitoring
well sampling. This sampling revealed benzene and toluene levels in excess of one
or more of the allowable concentrations under Table 910-1 for 5 out of the 16
monitoring wells. The sampling showed one well having benzene levels of up to
4,400 µg/l; toluene levels of up to 9,200 µg/l; and total xylenes of up to
4,900 µg/l, a second well having levels at approximately half these readings, and
the other three wells showing only exceedances of benzene, at significantly lower
concentrations.
11.
On August 31,
2010, COGCC issued Notice of Alleged Violation 200268806 (“NOAV”) to Antero
alleging violation of the following rules: [Language deleted.]
a. Rule 209,
which requires operators to exercise due care in the protection of coal seams
and water-bearing formations, with special precautions taken in drilling wells
to guard against any loss of artesian water from the stratum in which it occurs
and the contamination of fresh water by objectionable water, oil, or gas;
b. Rule
324A.a., which requires operators to take precautions to prevent significant
adverse environmental impacts to air, water, soil, or biological resources to
the extent necessary to protect public health, safety and welfare and to
prevent the unauthorized discharge of E&P waste;
c. Rule
324A.b., which provides that no operator, in the conduct of any oil or gas
operation, shall perform any act or practice which shall constitute a violation
of water quality standards or classifications established by CDPHE-WQCC for
waters of the state;
d. Rule
901.f., which requires that operations in sensitive areas shall
incorporate adequate measures and controls to prevent significant adverse
environmental impacts and ensure compliance with the concentration levels in
Table 910-1, with consideration to WQCC standards and classifications;
e. Rule
906.e.(2), which requires that operators determine the cause of a
spill/release, and, to the extent practicable, implement measures to prevent
spills/releases due to similar causes in the future. For reportable spills,
operators are required to submit this information to the Director on the
Spill/Release Report, Form 19, within ten days after discovery of the spill/release.
f. Rule
907.a.(1), which requires that operators shall ensure that E&P waste is
properly stored, handled, transported, treated, recycled, or disposed to
prevent threatened or actual significant adverse environmental impacts to air,
water, soil or biological resources or to the extent necessary to ensure
compliance with allowable concentration levels in Table 910-1, with
consideration of WQCC ground water standards and classifications; and
g. Rule
907.a.(2), which requires that E&P waste management activities shall be
conducted, and facilities constructed and operated, to protect the waters of
the state from significant adverse environmental impacts from E&P waste.
Staff
has voluntarily dismissed the Rule 209 and Rule 906 alleged violations.
12. The NOAV
required the following abatement actions to be completed by September 10, 2010:
a. Develop a
Form 27 Site Investigation and Remediation Work Plan (Rule 906.d) in
consultation with the COGCC. Include a monitoring and abatement plan based on
delineation.
b. Delineate
the horizontal and vertical extent of the release including evaluation of
gravel pit liner's and dewatering pump's influence on contaminant plume.
c. Collect
analytical samples at seep, each separate settling pond, and CDPHE outfall on a
daily basis for a minimum of BTEX/TPH, TDS, CL analysis until such time the
COGCC agrees that frequency can be reduced.
d. Collect an
analytical sample weekly at the CDPHE outfall for Volatiles/Semi Volatiles
(8260/8270), anions/cations, sulfates, pH, and TDS for minimum of 2 months or
until the COGCC agrees to reduction in analytical suite and/or frequency, then
twice-monthly sampling for 6 months, evaluate at that time.
e. Consult
with Grant Brothers, CDPHE and DNR-Reclamation Mining and Safety to maintain
compliance with existing Grant Brothers' permits.
f. Conduct
chemical analysis of produced water and condensate that was in the Pipeline
based on chemical inventory receipts and MSDS sheets for all wells connected to
the Pipeline.
g. Provide
construction date, pipeline design and integrity testing records for the Pipeline.
h. Inform
landowners of ongoing work and subsequent results of the work being conducted
and provide regular status updates.
i. Provide
chemical inventory sheets for all wells connected to the Pipeline per Rule 205.
13. On
October 21, 2010 Antero conducted a pothole assessment by digging sampling
holes at several locations, revealing that hydrocarbon contamination present in
the soils at those locations was in seasonal contact with shallow groundwater.
This pothole assessment was conducted consistent with the Form 27 Work Plan
submitted by Antero on September 30, 2010.
14. In
2011, Antero proceeded to perform an in-situ chemical oxidation (“ISCO”)
pilot project for the purpose of hydrocarbon source reduction in impacted soil,
with Staff approval. In a presentation made to Staff to discuss the ISCO pilot
project results on September 2, 2011, Antero estimated the initial impacted
groundwater extent to be within an area approximately 150 ft by 190 ft. COGCC
staff agreed with the estimate of aerial extent. Antero and Staff estimated the
impacted area to be localized within a three and five feet zone.
15. On
September 19, 2011, a soil sample taken as part of a quarterly monitoring
effort from an area with observed paraffin seepage from the east wall of the
gravel pit revealed total petroleum hydrocarbons (“TPH”) concentrations in
soils in excess of allowable levels. BTEX compounds from the same sample event
were all within allowable levels.
16. The parties
have concluded that a release from the produced water Pipeline segment west of
the Robinson A pad and east of the Loesch Gravel Pit was the source of the
contamination detected emanating from soils and in groundwater seeping from the
eastern Loesch Gravel Pit wall on July 27, 2010.
17. Antero
initiated excavation of the remaining impacted soil pursuant to an approved Form
27 on September 10, 2012. The remediation work was completed on September 28,
2012. The approved Form 27 requires four consecutive quarterly groundwater and
soil samples showing compliance with Table 910-1 standards. The quarterly
sampling efforts performed to date have revealed compliance with Table 910-1
standards.
18. In addition to
Antero’s four quarters of sampling demonstrating ongoing and continuous
compliance with Table 910-1 standards, the COGCC also conducted confirmatory
soil and water sampling at the request of the landowner.
a. On October
23, 2013, COGCC, through an independent third party contractor, and following
consultation with the landowner, conducted soil sampling on a larger area of
irrigated cropland adjacent to the site. Again, all results from this sampling
are in compliance with COGCC Table 910-1 standards. Additionally, the report
for this sampling stated that the contractor does not find evidence linking the
release to any suspected adverse impacts to the irrigated cropland.
b.
On
December 30, 2013, COGCC, through an independent third party contractor,
conducted surface water sampling at two surface water locations between the
site and the Colorado River. All results from this sampling are in compliance
with COGCC Table 910-1 standards, and again the contractor’s report found a
lack of any link between the release and any suspected adverse impacts to
surface water systems.
19. On March 10,
2014, after reviewing the available data and consulting with COGCC staff, the
Colorado Department of Public Health and Environment issued a statement
confirming “that no reasonable potential exists for this discharge to exceed
potential limitations for organic parameters in the receiving stream.”
20. On March 26,
2014, COGCC staff determined that no further action for the remediation and
NOAV is required.
21. Rule 523.
specifies a base fine of one thousand dollars ($1,000) for each day of
violation of each of Rules 324A, 901, and 907. Rule 523.a.(3) specifies that
“the maximum penalty for any single violation shall not exceed Ten Thousand
dollars ($10,000) regardless of the number of days of such violation,” unless
the violation results in significant waste of oil and gas resources, damage to
correlative rights, or a significant adverse impact on public health, safety or
welfare or the environment. Staff alleges significant adverse impact on public
health, safety or welfare or the environment. Because the base fine for these
violations is set at $1000 per day of violation, the aggravating factors set
forth in Rule 523.d. are not applicable by their terms.
22. The parties
agree to calculate a fine in this matter based on consolidating alleged
violations of Rules 324A, 901, and 907 into a single violation of Rule 324A.,
for failing to manage exploration and production wastes, and otherwise act in a
manner to prevent significant adverse impact to the environment.
23. The exact date
of the release of the E&P waste from the pipeline, and the volume of
E&P waste released from the pipeline, are not known.
[Paragraph
deleted, paragraphs renumbered accordingly.]
24. The parties
agree to resolve this enforcement action with a fine of $150,000.
[Paragraph deleted,
paragraphs renumbered accordingly.]
25. Pursuant to
Article IX of the “Memorandum of Agreement” between the Water Quality Control
Division (“WQCD”) and the COGCC, adopted February 15, 2000, COGCC Staff
conferred with WQCD enforcement staff in determining the monetary penalty
against Antero for violations of WQCC standards for surface waters (including
any subsurface water to the extent there exists a hydrological connection
between the surface and the subsurface water.) WQCD indicated it agrees with
the fine and the terms of this AOC and will not pursue any additional penalty.
26. Pursuant to
Rule 522.c.(3), Antero agrees to the findings of this AOC as amended herein,
for the purpose of expeditiously resolving the matter without a contested
hearing, and agreement to this AOC as amended herein, shall not constitute
an admission of the alleged violations or fault for any other purpose. Antero
fully reserves its right to contest any factual or legal determinations set
forth in this Order in any future action or proceeding other than a proceeding
to enforce this AOC.
ORDER
NOW, THEREFORE, IT IS
ORDERED, that:
1. Antero
is found to be in violation of Rule 324A. This matter shall be referred to
as the Antero Pipeline Release and no longer referred to as the Gravel Pit
Release.
2. Antero
is assessed a fine of $150,000 in settlement of this action. [Language
deleted.] The Commission acknowledges that this penalty has already been paid.
3. Payment
of the fine pursuant to this AOC does not relieve Antero from its obligations
to complete abatement or corrective actions set forth in the NOAV, as may be
amended or modified by Staff.
4. Antero,
or its successors or assigns, shall remain responsible for complying with this
AOC.
5. The
Commission considers this order to be final agency action for purposes of
judicial review 30 days after the date this order is mailed by the Commission.
6. The
provisions contained in the above order shall become effective immediately.
7. The
Commission expressly reserves its right after notice and hearing, to alter,
amend, or repeal any and/or all of the above orders.
RECOMMENDED
this 25th day of April, 2013.
AMENDMENT
RECOMMENDED this 11th day of April 2014.
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OIL
AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Peter J. Gowen, Enforcement Officer
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AGREED
TO AND ACCEPTED this 28th day of April, 2013.
AMENDMENT
AGREED TO AND ACCEPTED this _____ day of April, 2014.
ANTERO RESOURCES PICEANCE LLC (Antero)
By:___________________________________
Signature of Authorized Antero Representative
_____________________________________
Print Signatory Name
_____________________________________
Title of Signatory
===================================================================
ENTERED this 7th day of May, 2013, as of the 6th
day of May, 2013.
Amended
Order ENTERED this day of May, 2014, as of the 28th
day of April, 2014.
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OIL
AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
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By____________________________________
Robert J.
Frick, Secretary
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